Global trade continues to grow, but vulnerability intensifies
Recently, the United Nations Conference on Trade and Development released the April edition of the Global Trade Update report, which pointed out that although global trade demand remains strong in some areas, it is difficult to offset the negative impact of current geopolitical and economic challenges and trade frictions, and global trade continues to grow while increasing vulnerability.
The report shows that by 2025, the total global trade in goods and services will increase by about $2.5 trillion, reaching about $35 trillion, demonstrating strong growth momentum. However, the inclusiveness and sustainability of this growth are relatively insufficient, and there are structural vulnerabilities.
Firstly, regional trade shows differentiation. East Asia and Africa will drive the growth of global trade in 2025, with South South trade performing better than the overall global trend. However, in contrast, growth in Europe and North America has been relatively flat, with some economies even experiencing a decline in imports.
Secondly, trade price pressure persists. Despite a slight decrease in global trade inflation in the fourth quarter of 2025, a rapid rebound in early 2026 indicates that trade price pressure remains significant. The average trade inflation rate over the past 12 months has been around 4%, which continues to exert upward pressure on the global trade value.
Finally, global trade imbalances remain prominent. Although the global trade imbalance in goods remained relatively stable in the fourth quarter of 2025, the bilateral trade imbalance between major economies remains significant. There are significant differences and fluctuations in trade trends among various industries. Agricultural trade will expand strongly in 2025, but the momentum will slow down at the end of the year; The overall decline in natural resource trade; The strong demand for manufacturing, especially mechanical equipment, has driven trade growth. In energy related products, the trade in fossil fuels has sharply declined, while the performance of renewable energy products varies. The trade of electronic products continues to grow, while the trade of automobiles has shown average performance.
The report points out that the Middle East conflict and the disruption of shipping in the Strait of Hormuz continue to disrupt energy flows and regional logistics, leading to unstable energy markets and rising global logistics costs. Conflicts pose a threat to broader geopolitical stability, indirectly affecting global economic activity, weakening the confidence of businesses and consumers, and suppressing trade demand. The United States remains an important source of trade policy uncertainty. Although the lifting of some tariffs by the United States has brought some relief, the expansion of the scope of the unilateral "301 investigation" by the US may lead to the introduction of new tariff policies, increasing the uncertainty of the trade environment.
In addition, the upcoming renegotiation of the "US Mexico Canada Agreement" further increases the uncertainty of the North American trade model, and businesses may delay investment and trade decisions as a result. Except for the United States, governments around the world are increasingly adopting export controls, subsidy systems, industrial policies, and non-tariff measures to promote the growth of strategic sectors. These measures often have trade restrictions and reduce market predictability. At the same time, it leads to market fragmentation, increases the compliance burden and operating costs of the supply chain, especially for small and medium-sized enterprises, further suppressing trade activities. The report points out that in sectors such as green industry and advanced manufacturing, under the combined effect of stimulating industrial policies and weak global demand, there may be a problem of oversupply, further intensifying competition within the strategic value chain, which may lead to the escalation of trade disputes and disrupt the global trade order.
The report points out that although global trade achieved growth in 2025, it is expected to slow down in 2026 due to geopolitical conflicts and rising trade costs. Although growth is expected to continue in the first quarter of 2026, the momentum of subsequent growth will weaken. Although manufacturing trade has shown strong performance in 2025 and is expected to continue growing in 2026, the growth rate will slow down and it will be difficult to reverse the overall decline, especially in energy related commodity trade, which has been directly affected by the Middle East conflict and the disruption of shipping in the Strait of Hormuz. The growth of service trade has slowed down in recent quarters and is expected to continue to face challenges in 2026. The high cost of fuel has driven up travel and transportation expenses, reducing the driving force of trade in this critical sector. The report predicts that the trade performance of various economies will further diverge, and it is expected that the exports of major economies will continue to grow in 2026, but the growth rate will vary; Import growth will become more differentiated, with some economies such as India and Russia achieving significant growth, while other economies such as Brazil and South Africa will experience a decline. In response to this trade development prospect, the report calls for strengthening South South cooperation, diversifying trading partners, promoting technological innovation and industrial upgrading, enhancing energy security and sustainable development, etc., to create more favorable conditions for global trade growth.